People, Travel

Small Share of Tourism

Small Share of TourismSmall Share of Tourism

Based on the Tourism Satellite Account (TSA), measured by the UK, the share of tourism in Iran’s GDP during 2013 was 2%, according to the Persian daily Forsat-Emruz.

As stated on the World Tourism Organization Network website (, the Tourism Satellite Account (TSA) is a standard statistical framework and the main tool for the economic measurement of tourism.

The Tourism Satellite Account: Recommended Methodological Framework 2008  (also known as the TSA: RMF 2008) provides the updated common conceptual framework for constructing a TSA.

It adopts the basic system of concepts, classifications, definitions, tables and aggregates of the System of National Accounts 2008 (SNA 2008), the international standard for a systematic summary of national economic activity, from a functional perspective.

The TSA thus allows for the harmonization and reconciliation of tourism statistics from an economic perspective. This enables the generation of tourism economic data (such as Tourism Direct GDP) that is comparable with other economic statistics.

Exactly how the TSA does this, relates to the SNA logic of contrasting data from the demand-side (the acquisition of goods and services by visitors while on a tourism trip) with data from the supply-side of the economy (the value of goods and services produced by industries in response to visitor expenditure).

When compared to countries like Turkey and Egypt, the statistics show that the investments made in Iran’s tourism sector are too small to enable the country to compete with others.

If the investments continue within such a limited scope, there is not much hope for the tourism industry of the country, economist Mohammad-Reza Farzin,from the University of Allameh-Tabatabaee, said.

 Limited Budget

There are four clauses in the development budget of the two years starting March 2014 and 2015. A total of $116 million which as an investment budget, was allocated to Iran’s Cultural Heritage, Handicrafts and Tourism Organization (ICHHTO); whereas a total of $12 million was allocated for upgrade, repair and restoration of museums and historical monuments.

The current year has $7 million for development of handicrafts; while next year, starting March 20, has no such clause, Farzin said.

To support ICHHTO, a sum under 0.8% of the development budget is allocated to tourist infrastructure and facilities, while the sector is incredibly vast. A number of government bodies have tourism subcategory in their budget plan, such as the ministry of health where there is a budget clause for health tourism.

As for other organizations, there is no guarantee that the tourism sector can enjoy a share. There is no adequate funding for tourism, and no miraculous development can be expected in the sector, Farzin said.

 Tourism Market

The structure of the tourism market affects the behavior and functioning of travel agencies. General and government policies play a key role in the structure. Tax, subsidy, trade laws, tariff regulations, competition rules, and information supply are among the policies.

The country’s tourism market suffers structural deficiencies, Farzin noted, and referred to the fact that there is no large, credible, multinational, and experienced company in the sector. Currently, only small agencies are active in tourism. They are not able to enter the regional competition, let alone the international.

Tourism should have not been merged within ICHHTO’s concerns, Farzin believes. ICHHTO is an expensive organization, devouring all possible budgets. It would have been more appropriate to pass tourism sector to the organizations affiliated to the ministry of industry, mine, and trade.

Regulations should be set in way that are more encouraging of investment. It is the responsibility of provinces to prepare favorable grounds for activities of the agencies; or else, the agencies will move to the sectors where investment is more secure and profitable.

Free time gives birth to tourism. To deal with the tourism industry, one should go back and manage leisure time. ICHHTO should plan the timing of tourism on the basis of different climates and geographies. Thus, each climate can be enjoyed in its due time.

To enable tourism to develop and help the country’s economy lift its weight from the oil industry, the sector should be regarded as other significant industries, and be allocated a far bigger budget than it has. If not as much as in other industries, investments in tourism should be at least proportional to the country’s capacities.